Most models currently used to determine optimal foreign reserve holdings take the level of international debt as given. However, given the sovereign's willingness-to-pay incentive problems, reserve accumulation may reduce sustainable debt levels. In addition, assuming constant debt levels does...

In July 1997, the economies of East Asia became embroiled in one of the worst financial crises of the postwar period. Yet, prior to the crisis, these economies were seen as models of economic growth experiencing sustained growth rates that exceeded those earlier thought unattainable. Why did the...

This paper evaluates the policy choices and factors that have contributed to the Asian crisis. It is argued that the interaction between relatively closed and weak banking systems and liberalized financial flows played a major role in the crisis. The prospect of an IMF bailout is also likely to...

The main strength of today's international monetary system – its flexibility and adaptability to the different needs of its users – can also become its weakness, as it may contribute to unsustainable growth models and imbalances. The global financial crisis has shown that the system cannot...

In 1998, following some 10 years of structural reforms that began during the late Soviet era under the Perestroika processes and continued after the collapse of the USSR, Russia has recorded its first year of economic growth. Then, with virtually no advanced warning, by the of August 1998,...

It has taken two crises - the Asian financial crisis of 1997-1998 and the global financial crisis of 2007-2009 - for the international community to seriously focus on the reform of the international financial architecture for crisis prevention, management and resolution. Facing the global...

The paper evaluates current account dynamics in countries with different exchange rate regimes within the EU. In this, the empirical analysis explicitly differentiates between countries with a flexible and a fixed exchange rate regime and members of a monetary union. In addition, we model the...

Financial safety nets in Asia have come a long way since the Asian Financial Crisis (AFC) of 1997 - 98. Not wanting to rely solely on the International Monetary Fund (IMF) again, the Chiang Mai Initiative (CMI) was created in 2000. When the CMI also proved inadequate following the Global...

In the policy debate on the effectiveness of the Global Financial Safety Net, concerns have been raised that expectations of adverse effects of IMF programmes may deter countries from asking for an IMF programme when they need one, a form of "IMF stigma". We explore the existence of IMF...

This paper compares financial assistance programmes of four euro-area countries (Greece, Ireland, Portugal, and Cyprus) and three non-euro-area countries (Hungary, Latvia, and Romania) of the European Union in the aftermath of the 2007/08 global financial and economic crisis-which were supported...